Private equity investors are tracking increased flow of large-cap buyouts across Asia, but with an asterisk on feasibility. To a significant extent, opportunities will skew towards firms with the institutional heft to support aggressive global expansions against a complex macro backdrop.

Speakers at the AVCJ Private Equity Forum 2025 crystallised this outlook with observations about the higher operational hurdles required to pursue scaled control deals in Asia. With diminished economic tailwinds has come a heightened need for creativity and specialisation. For large-cap deals in particular, there is increasing pressure on GPs to be able to support cross-border bolt-on acquisitions.

Appetite broadly tracks fund size and geographic scope. Hans Wang, a managing director and head of Greater China at CVC, observed that his firm’s average cheque size has increased from USD 170m about eight to 10 years ago to more than USD 250m currently. This period touches on three pan-Asian fund vintages, during which CVC has grown from USD 3.5bn to USD 6.8bn.

Many middle-market country managers, meanwhile, are happy to remain just that. ChrysCapital Partners recently closed India’s largest-ever PE fund on USD 2.2bn, but the firm is more inclined to sell to CVC than compete with it. Sanjay Kukreja, a partner and CIO at ChrysCapital, said the sweet spot would remain USD 100m-USD 200m. The firm is targeting more buyouts, but not solely buyouts.

Cindy Yan, a senior managing director at Ontario Teachers’ Pension Plan (OTPP), told the forum that Asia offers significantly more opportunity to deploy at scale than a decade ago. However, GPs must evolve to fully exploit the market. This means differentiation via deepened sector expertise and creating repeatable platforms with long-term perspective.

“The question is not just about whether there are deal opportunities, but how the managers and investors can scale up successfully. That’s the more important question for me,” Yan said.

“First, identify large deep markets, and when you have success, double down. Second, focus on your sector because when large deals come, you have to make concentrated bets. You have to sharpen your right to win and have high conviction. Last point, scale is not just about deploying and raising more capital – it’s also about returning capital at scale and doing it consistently cycle after cycle.”

Deal drivers

There are several stable, arguably secular, drivers of increasing large-cap buyout activity in Asia. In Japan and South Korea, this includes trends toward corporate governance reform, corporate restructuring, and public activism around streamlining businesses. In India and Southeast Asia, founder succession has proven a strengthening theme.

Meanwhile, the region is widely considered vulnerable yet relatively resilient to geopolitical tensions, including an erratic US tariff regime. The major economies are performing as expected on the back of long-term fundamentals, including the rise of the middle classes, rapid digitalization, and urbanization.

It has attracted new entrants in recent years such as Apollo Global Management, which has made a clutch of investments, largely in Japan, since 2019. The challenge is that large-cap deal flow remains relatively sporadic. Whenever there is a process for an asset of size, it is usually swarmed by sponsors, pushing up valuations to a point that is difficult to reconcile with current market volatility.

Apollo’s solution is to lean into complexity. Its core sectors in Asia, manufacturing and industrials, tend to be cross-border and exposed to tariffs; its prevalent transaction type is a corporate carve-out.

Recent activity includes the acquisition of Panasonic Automotive Systems for about USD 2bn and a USD 1.5bn buyout of Australia-founded mining industry supplier Molycop. The latter transaction, in partnership with Indian strategic Tega Industries, is expected to close next month.

According to Tetsuji Okamoto, Apollo’s Asia private equity head, carve-outs appeal partly because there is scope to counteract tariff risk. Counterparties are B2B businesses, cognizant of not disrupting value chains. The need for alignment is therefore elevated, requiring pre-deal engagement processes lasting six to 12 months, effectively ensuring proprietary deal flow.

Apollo also leverages a newly launched tariff taskforce, which compares trade uncertainty experiences among some 200 portfolio companies. The learnings are passed from region to region.

“We understand the trends and initiatives that are going on globally within our entire system. We then figure out and apply the right initiatives to our Asia portfolio companies, as well as in our underwriting for new deals. How can we bound the uncertainty and volatility from these tariffs?” Okamoto said.

“With that, we’re in a better spot in terms of figuring out which investments we’re comfortable with, and from there, we can lean in. So, the first half [of 2025] was learning and understanding the situation – but that’s quickly turned into us being on the offensive in the second half and into 2026.”

Throughout the global private equity industry, investors were teeing up for a busy second half, having seen processes thrown awry by the Liberation Day tariffs announced in April. Asia-based dealmakers and advisors alike have noted movement in deal pipelines.

“There has been a big shift in terms of appetite to do deals in the last two months,” said Peter Graf, head of sponsor direct lending for Asia at Ares Management. “Globally, you’ve got Electronic Arts, a USD 50bn-plus deal, and that appetite is coming through in Asia as well.”

Setting the tone

Still, the effect of the tariffs on industry psyche is evident in the data. There have been approximately 20 private equity buyouts of USD 500m or more in Asia year-to-date, roughly half the 12-month total for 2024. Japan, historically the strongest performer in this space, has notched six transactions in 2025; its annual average for the prior five years is nine.

The most dramatic slowdown is in Greater China, which averaged six large PE buyouts a year for the five years through 2024. According to AVCJ Research, only two have crossed the USD 500m threshold in 2025: a DCP Capital Partners-led USD 1.3bn acquisition of Sun Art Retail and Boyu Capital’s USD 2.4bn purchase of a 60% stake in Starbucks China.

The tally excludes deals of unconfirmed size such as Dayao Beverages. KKR was seeking USD 1.1bn in loans to financing to support the acquisition as of July, Mergermarket reported. Anecdotal feedback suggests there could be more to come in the weeks ahead.

It has contributed to a sense that China is turning back on, hard evidence pending. Investors have pointed variously to China’s labour efficiency advantages resulting in relatively minimal tariff effects, attractive valuations for stable businesses, and rebounding IPO activity in domestic stock markets.

“There’s definitely a lot more focus and interest and activity in China today than 12 months ago. With the Starbucks deal and a few others we’ve seen in the past six months, we are hopeful,” said an industry professional with an advisory firm involved in the Starbucks deal.

“The only question is whether it’s going to go back to a level we saw in 2016-2018. Maybe there won’t be 200 China buyout deals, but it will be a meaningful number. We are aware of a few healthcare and consumer deals in China, where likely buyers will be China GPs supported by a local champion. That’s the blueprint.”

Starbucks appears to set the tone for this outlook. Global investors got comfortable backing a brand name, presumably with aspirations to repeat the success of McDonald’s China. Carlyle, which exited its stake in McDonald’s China last year at a USD 6.4bn valuation, having paid USD 2.6bn on entry, made the final shortlist for Starbucks China. So did EQT and HSG, Mergermarket reported.

Ultimately, a local sponsor – Boyu – overcame the global players, perhaps by emphasizing its on-the-ground connectivity. Yet the participation of global GPs, otherwise standoffish about the market in the recent term, speaks to the pressure on large Asia funds to access the biggest deals.

For transactions that are happening, availability of financing has been steady, and GPs have been able to de-risk their equity exposure through significant LP co-investment. The most aggressive movers on this front are said to be Middle East sovereign wealth funds. Abu Dhabi Investment Authority (ADIA) and Mubadala Investment are regularly namechecked.

Frank Tang, chairman and CEO of FountainVest Partners, said the global capital currently most interested in China comes from the Middle East, describing the investors as thoughtful and contrarian. This is partly attributable to US tariffs levelling the playing field: “In 2018, it was the US tariff on China imports. Starting from April this year, it’s been the US tariff on imports from the entire world,” he said.

Impending uptick?

FountainVest, which invests across the region but typically targets assets where there is a China angle, is tracking an uptick in its deal flow this year. Recent activity includes an investment alongside CPE Capital in Hong Kong-based SML Group, a company that brings radio-frequency identification technology to garment label production. The deal reportedly values SML at USD 600m.

Softening valuations are a significant aspect of China’s perceived rebound, especially when the effects of geopolitical tensions and the industrial impacts of artificial intelligence (AI) are impossible to calculate.

“Sometimes you really cannot quantify the uncertainty in the market, so when there is not a meeting of minds on valuation, it’s very hard to take a leap of faith,” Tang added. “When the valuations start to give you a buffer for certain situations in that uncertainty, then maybe you can say, ‘Let’s go for it.’”

The consensus view is that the drop-off in deal flow following the US tariffs announcement is a hiccup already correcting. Investment for the year has therefore been disappointing versus initial expectations, but even if GPs have closed fewer transactions, they have continued to explore. Gradually, investors are acclimating to the new normal.

“There wasn’t one event, or even a couple of events, that ended the pause we observed in the market post Liberation Day. It was more that people acknowledged that they can’t keep driving with the handbrake on,” said Lars Aagaard, head of financial sponsors for Asia at Jefferies.

“After what the market has seen this year, it’s unrealistic to expect a completely stable backdrop against which to underwrite over the next few years.”

There is a general confidence that large-cap buyouts are becoming more prevalent around the region. This assessment extends from Australia – a stalwart buyout market attracting global and regional actors – to geographies not long ago regarded as frontier. One industry professional interviewed for this story predicted that Vietnam would see more USD 500m-plus deals.

During the five years to 2024, there were 24 buyouts above USD 500m in India, a 60% increase versus the prior five-year period, according to AVCJ Research. There have been only two deals in this size range in 2025 to date. However, local traction can be difficult to contemplate given the number of companies that become US-domiciled while retaining substantial India-based backends.

Subdued buyout statistics in this market also mask momentum in deals of undisclosed size, exceptionally large minority transactions, and PIPE deals. Standout activity in this vein includes Alpha Wave Global and Temasek Holdings investing USD 1.5bn in a 15% stake in Haldiram Snacks last March. The following month, Warburg Pincus and ADIA acquired a 15% stake in IDFC First Bank for USD 870m.

“When we speak to investors, Asia emerges as a bright spot. The tariff impact is limited, especially for our business in Asia, which is very domestic focused. We underwrite largely based on domestic demand in Asia and strong double-digit revenue growth – 60% of our returns are still driven by growth,” said Hari Gopalakrishnan, a partner and head of India at EQT.

“If anything, we expect the global situation to create more tailwinds for Asia. From that aspect, there has been no change in the underwriting process because of the global situation.”

All about Japan

Most projections for a stronger 2026 put Japan at the centre of the action. Even with the drop-off in USD 500m-plus transactions this year, it still has the largest share by deal count and boasts the two largest entries. EQT could make a late contribution with its largest Japan investment to date, a USD 2.7bn take-private of elevator and escalator manufacturer Fujitec. A tender offer is set to be finalised next month.

Bain Capital is leading the charge in Japan. It has completed at least five buyouts of USD 500m or more in the country since the start of 2024, according to AVCJ Research. These include both of 2025’s top two: carve-outs of York Holdings – Seven & I Holdings’ supermarket business – and Mitsubishi Tanabe Pharma Corp, worth USD 5.4bn and USD 3.3bn, respectively.

Yuji Sugimoto, Bain’s Tokyo-based head of Asia, described the large-cap buyout market as softer than expected, although he highlighted Japan, India, and Southeast Asia as pockets of resilience. This has come with a regionwide shift toward more complex deal structures and more prevalent sponsor-to-sponsor activity.

“We view this environment not as a slowdown, but as an opportunity to invest in structural transformation themes. In Japan, for example, we are seeing a strong wave of corporate portfolio realignments and carve-outs as conglomerates focus on strategic core businesses,” Sugimoto said.

“We are actively supporting these carve-outs through hands-on value creation – helping management teams establish independence, strengthen governance, and drive operational improvement and digital transformation.”

Apollo’s Okamoto likewise expects Japan to continue to drive his firm’s deal flow in 2026, flagging a growing need for partnerships that include hybrid funding. Apollo has experience in this area globally, having facilitated acquisitions in the US for the likes of Sumitomo Corporation and Sony Music.

“Not all corporates are looking to be taken out in a buyout. We want to emphasize how we can be a partner in a solution for what they’re looking for rather than just pushing a 100% buyout product into their faces,” he said.

“We’re willing to shift flexibly across the capital structure to meet the needs of these corporates. The roots are in private equity in terms of the relationship and partnership mindset. But there’s a lot of technology that we have across the capital structure in other markets that we want to bring to Japan.”